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HMRC internal manual

Stamp Taxes on Shares Manual

Companies and shareholders: company takeovers: calculation - consideration as cash and/or shares

Where shares are transferred in the course of the takeover of a company, stamp duty is chargeable by reference to the amount or value of the consideration for the sale (FA99/SCH13PARA2). How this is determined will depend upon the form of consideration given for the transfer.

Consideration in shares and cash

The element of the consideration relating to shares is valued as set out at STSM077050 and the cash element added to it to arrive at total consideration.

Shares with a cash alternative

Where consideration for the offer consists of shares or a cash alternative, the offer will often provide for the shares to be sold by the offeror on acceptance, to fund the cash consideration if this is chosen. In this case, the consideration for stamp duty purposes is taken to be the underlying shares, valued as set out at STSM077010.

Where there is no such arrangement, the consideration is taken to be the stated amount of cash per the offer (even if the shares alternative is chosen). If Renounceable Letters of Allotment are used in such a case, there will be a charge to SDRT- see STSM072030 and STSM072040.